and of the arts, that he may learn in what manner a I bring a knowledge of any delinquency to the notice of cheaper article may be substituted for a dearer in the the competent authority. Besides this, much time is creation of his product. A fortune has frequently been saved by system and regularity. When one is obliged realised by the discovery of a cheaper dye-stuff

, or the to wait for another, much labour is of necessity wasted. substitution of a single cheaper material in the place of Tools should always be in the best possible condition. that ordinarily in use.

This saves time, and takes away one of the most com3. Every utility possessed by the material consumed mon excuses for negligence. should be rendered in the best manner available. Thus in an oil-mill the flax-seed from which linseed oil has

Consumption for Gratification. been expressed is a valuable food for cattle. After the Consumption may be conducted upon economical brewer has extracted the saccharine matter from barley, principles or the reverse. It is clearly the interest of the grains, as they are called, are valuable for the every individual that he should not consume his capital same purpose. The tau bark, after the tanning matter by expenditure upon objects which are to yield him no has been extracted, is valuable for fuel. This economy pleasure or profit of any kind; that ererything he purof materials is very well illustrated in the manufacture chases should be consumed as thoroughly as possible, of combs. In a well-conducted establishment of this and not in any respect wasted. In this way no labour kind, every part of the horn, the core, the body, the is lost. It is the same with national consumption or tip, the shavings, the fat, and the mucilage, are all expenditure. When the public money is spent upon turned to some available purpose.

war, upon idle functionaries or sinecurists, or upon any Nor is this all. The values which are consumed kind of public work which is not to be either direct.y should be consumed to the very last. Thus in the work or indirectly useful, the labour which produced that ing of a steam-engine it is necessary to evolve a great money is lost, or has gone in vain. It is nothing in amount of calorie, and this is the most expensive part such cases to say that inoney has been circulated, that of the process. Now economy demands that this caloric employment has been given, and so forth. Men do should be produced at the least possible expense, and not absolutely need to be kept working in any particular that having been produced, it should be used for every way, and every idle consumer of others' goods than his purpose that it can be made to serve. But every one own is a source of loss to the community. The labour inust have perceived, by the flame which escapes from could have been applied otherwise, and to a useful in. the chimney of a furnace, that a very large portion of stead of a useless end. “There is one duty,' says a the caloric evolved is absolutely wasted. A very great recent writer, ‘very often ostentatiously professed hig cconomical improvement has of late been made in the richer to the working and trading classes, from some of the iron-works in Great Britain. This caloric, which political economists would readily grant then which was formerly wasted, is used to heat the air an exemption--the spending of money for the good of which is blown into the furnace. By this expedient a trade. People have been known to claim credit for this very great saving of fuel is accomplished,

amiable motive not only when pomp and luxury are in Consumption of Labour.-As labour is expensive in reality the exciting causes of their purchases, but eren the same manner as capital, economy teaches us to when they fail to pay the price of what they have ob. consuine precisely as much of it as is necessary to ac- tained. The epistolary and miscellaneous literature of complish our purpose in the best possible manner. the eighteenth century shows that it was sometimes a

1. We should employ no more labour than is neces- fixed creed, especially in France, that if the rich did sary. Too many labourers will always encourage each not spend their money on a certain humane and other in idleness. When there is one man at leisure to rational scale, the world of tradesmen and labourers tell stories, the time of several others must be consumed must necessarily starve. There is, however, a material in listening to them.

difference between what is spent in the ordinary accep2. We should employ no less labour than is neces- tation of the term, and what is devoted to productive sary. When, from want of a sufficient number of purposes. In the latter case, whoever receives the labourers, one labourer is obliged to perform several money in his hands, be he speculator or workman, muss kinds of work, we lose the advantage of division of restore something at least equal to it in value, if not labour, and also expose ourselves to all the inconve. more valuable. But spending does not involve this niences of confusion and disorder.

phenomenon in all its grades. Much of the money dis3. We should employ labour of no higher price than persed around him by an extravagant man is consumed is necessary. In any extensive operation, it will be in this or that stage; it very seldom leaves behind it seen upon reflection that some parts of the process re- value nearly equal to its amount. If it be right quire more skill and attention than others. Some will to preach that men should spend money for the good of require labour worth five or ten shillings a day, and trade, economy ought to be dumb; it is a paltry houseothers labour worth not more than eightpence or one hold quality that must sink before the philanthropie shilling a day. It is of great importance in any large spirit of animating trade and labour by expenditure. establishment so to arrange the labourers that no work. We do not find, however, that any one dares thus to man shall be employed at a higher price than the set the two virtues in antagonism against each other. labour which he performs is actually worth. It is, | When people speak of encouraging trade, they do so however, to be remarked that ar error inay exist of the generally, and without reference

any antagonistic opposite kind. It is as bad economy to employ too principle; and if it were asked whether it were more cheap as too dear labour. In the one case we lose by consistent with duty, both public and private, to spend paying too high a price for labour, in the other by that a sum which would be missed in the household for the destruction of materials which always results from the benefit of trade, or to retain it for home purposes, it want of skill in a labourer.

would be difficult to find any one prepared seriously to 4. The labour which we have paid for should all be support the former line of expenditure. In fact, when performed. Time is money, to him at least who pays expenditure for the benefit of trade comes to be conmoney for it. If it be wasted, his money is thrown sidered along with other serious uses of the pecuniary away; and by throwing away money no one ever be means of a family, they never are deliberately weighed came rich.

against each other, and the philanthropic motire se. In order to secure this result, several things must, mains forgotten until the head of the house grows rich.' however, be attended to. The most important of these is, that he who employs labourers should in person

** We have to acknowledge ourselves indebted for the above superintend his own affairs. No one will take as much sketch of the science of Political Economy to an American interest in our own concerns as ourselves. When this writer. It is abridged, with a few alterations, from a small cannot be done, the establishment should be so arranged work entitled • The Elements of Political Economy, by Francis as to insure full and vigilant superintendence over Wayland, D.D., President of Brown University.' Boston, United every part, and under such responsibilities as will I States, 1837.



much better for all concerned to allow the manufacturer to pursue his own way in selling only very large

quantities to wholesale merchants. To these traders Max has been defined by some naturalists as an er- the same rule may be applied. They seek out the changing animal-an animal who buys and sells—that seats of manufacture, and purchasing a large variety being an act performed by no other living creature, of goods, they send them to the towns and places where and therefore suitable as a distinction in character, they are required by the public, and there the articles though others, much more exalted, might readily be can be had individually from a shop. It is evident that found. The practice of exchanging one commodity for if any man wish to buy a handkerchief, he may procure another is doubtless coeval with the first herding of it much more cheaply from any shop in which such mankind together. No man, even in the rudest savage things are sold at an advance upon the original cost, state, and who lives in the society of neighbours, can than if he were to travel perhaps hundreds of miles to rest satisfied with such objects as he can procure or the house of the manufacturer, and there make the fashion by his own labour. He must depend on vthers purchase. The use of an intermediate class to conduct for assistance, while he assists them in return. The exchanges is thus very conspicuous; and any attempt cultivator of the ground would exchange some of its to revert generally to the original practice of causing produce for an animal from the flocks of his neighbour; the maker to deal with the consumer, would be entirely and both would be glad to give a portion of their wealth incompatible with an enlarged system of trade between for the clothing or weapons made by a third party. different countries, or even between different places in Thus exchanging becomes a matter of convenience the same country. We say generally, because there between two parties, each of whom is anxious to obtain are instances in which makers may, with advantage to a share of the other's goods for a share of his own, and themselves and the community, sell their produce in a mutual advantage is the result. Such desires and small quantities or single articles to the public; but practices must have been displayed in the very earliest these are exceptions to a common rule. stages of society. No nation of African or Indian Convenience-which is for the most part but another sarages is ever found without a strong inclination to name for time, or labour, or capital--forms, it is evident, exchange the rude products of their country for the a guiding principle of trade, and requires the same articles possessed by the traveller ; an ox or sheep consideration as the actual value of an article. This, being perhaps eagerly offered by them for a single however, has been recognised only in very recent times. needle, a nail, or a sinall toy looking-glass.

At one period there were laws to prevent farmers from As mankind advance in their social condition, the selling their grain in a large quantity or by the lump, practice of exchanging increases; the desires and neces- without exposing it in an open market. Such laws sities become more urgent; each person finds it more were manifestly unjust. They interfered with the liberty profitable and agreeable to adopt and hold by one fixed of the farmer, who, in his capacity of manufacturer, had employment, and to sell the produce of his labour for surely a right to sell his produce in whichever way he a variety of articles made by others, than to attempt to felt it to be most for his advantage. It would be the make everything for himself; and finally, for the sake same kind of injustice if the law, for example, were of convenience, a class of persons are engaged to con- to prevent a manufacturer of handkerchiefs from sell. duct the exchanges from one hand to another. In ing them at his own workshop to wbolesale dealers, this improved condition, the production of articles of and causing him to take them many miles to a certain general consumption is called manufacturing; while street in a certain town, and there expose them for sale that department of industry in which the exchanging in small lots to the public. It is of the greatest imis transacted is called trade or commerce. For still portance in matters of trade and commerce never to infurther convenience, the business of exchanging is com- terfere in any shape to prevent men from dealing in mitted to sereral orders of traders -- the wholesale uchaterer manner appears most beneficiul and convenicnt merchants, who in the first instance purchase large to themselves, provided it be conformable with strict jusquantities of goods from the producers; the retail tice. Sellers, of whatever grade, being left to consult dealers, who have been supplied in smaller quantities their own interest and inclinations, the public in the from the merchants, and sell individual articles or end, though probably in a way not easily recoguisable minute portions to the public; and to these sometimes by an unreflecting mind, reaps the advantage. an intermediate dealer is added. In this inanner the Commerce, by which we comprehend traffic carried transfer from the workshop of the manufacturer to the on at home or with foreign countries, is of great antihouse of the actual consumer is interrupted by several quity, and both in the earliest times and in our own day distinct processes of exchange, in which each seller has been one of the principal engines of civilisation. obtains à certain profit at the expense of the person Among the industrious nations which at a remote who has ultimately to buy and use the article. It is a period of history were planted on the borders of the principle of trade, that the fewer hands through which Mediterranean Sea, it became a means of spreading any article is made to pass the better for the con- knowledge in the interior of Asia, and many parts of sumer, because the article can be brought with the Africa and Europe. Unfortunately, the intelligence least burthen of profits, or at the lowest price, into which was so disseminated was afterwards obliterated general use. But this principle, sound as it is in the by the overruling powers of barbarous and warlike abstract, is counteracted by another, which must on nations; but the efficacy of commerce in modern times no account be lost sight of. This is the principle of is likely to be permanent wherever its influence is exconvenience. A manufacturer engaged deeply in his tended, seeing that the greatest manufacturing and own pursuits finds it more profitable and agreeable to mercantile people are at the same time the most powersell his articles in large than small quantities. The ful and most capable of offering protection to those who maker of millions of yards of cloth has no time to spend sustain a commercial intercourse with them. It is exin selling single yards. If he were compelled to sell by ceedingly pleasing thus to reflect on what commerce is retail, he would have no time to conduct his affairs; he capable of effecting, independent of the actual comfort could manufacture only a small quantity, and therefore which it produces wherever it is fairly introduced. By being limited in his amount of produce and sales, he its appeals to the selfishness, the vanity, and other pasmust take larger profits. Thus, upon the whole, it is sions, good and bad, of mankind, it appears to be the No. 82,


best of all forerunners to the efforts of the schoolmaster pursuits of the smuggler. The restrictions and regu. and the missionary. Its influence in this respect has lations which governments usually impose upon coinbeen remarkably exemplified in the boundless regions of merce do not perhaps originate so much in the plea Hindoostan, which, by the efforts of a company of mer- that manufacturers and merchants stand in the condi. chants, have been laid open to the settlement of enlight- tion of children, and require to be taken care of lest ened men from Europe, who, though by slow degrees, they should hurt themselves, as from the unfortunate will ultimately spread the blessings of education and the exigencies under which the governments happen to be decencies of social life among many millions of human placed. They have all less or more engaged in wars, beings. In the remote islands in the Pacific Ocean, the which have been conducted at an enormous expense to influence of commerce has been recently of marked their respective countries. In order to liquidate these utility. The introduction of articles of a fanciful expenses, all kinds of taxes are levied, directly and nature, both for the ornamenting and covering of the indirectly; but as the levying of these taxes breeds person, has induced a desire of following European discontent, large bodies of military hare usually to be manners and customs; and as these commodities can- kept up, to act as an armed national police. Thus the not be procured but by the exchange of native com- people of these countries have for ages to go on paying modities, a spirit of industry has consequently been not only the price of the wars, or the interest of the produced which cannot fail to be of both moral and sums borrowed and laid out upon the wars, but as much physical advantage to the natives. It is always thus more for the military force afterwards imposed upon with the intercourse which commerce necessarily in them. What is more distressing, the people have provolves. New tastes are created, and to be gratified bably to give a deal of money, in order that their reindustry must be exerted. But to witness the extra- spective governments may be the more able to secure ordinary influence of commerce in producing civilised the attachment of men of consequence to assist in and refined habits, we need not look beyond our own allaying the general clamours for a redress of grierances. country. Commerce, in this its chosen seat, has caused This is a very rough view of the matter, but it is enough roads everywhere to be cut, canals to be opened, rail. to show the dreadful exigencies into which nations fail ways to be formed, expeditious modes of travelling and by their engaging in wars or other expensive follies. communicating by sea and land to be effected; all of In whatever manner, however, national exigencies oriwhich great accessories to our comfort have tended in ginate, the plan pursued for relief consists chiefly in the most wonderful manner to introduce not only use the imposition of duties on certain commodities much ful commodities and personal luxuries, but highly cul- in demand, and at various stages of their manufacture, tivated sentiments, literature, and the arts, into dis- transmission, and sale. It is likewise customary to tricts which at no distant period lay in a comparatively impose duties on goods imported from foreign counprimitive condition. The intercourse which commerce tries, with the view of protecting the manufacturers of in this manner requires is the grand lever which, it is such articles in this country ; but this only benefits apparent, must in the first place be employed to lift a class, or a few persons, at the expense of the whole the load of ignorance from oti

' the natives of Africa and community, and therefore all such duties are in the other barbarous regions; and when this lever is pro- main as detrimental to trade and the public welfare as perly insinuated, the way will soon be prepared for the those imposed for the liquidation of national debt and introduction of those nieasures of melioration which expenditure. For further observations in relation to philanthropists so an xiously design.

this subject, we refer to the article POLITICAL ECONOMY. It is obvious that this scheme of mutual interchange.

There is,' observes Mr M'Culloch in his Dictionary of among nations of the commodities which they respec-Commerce,'' no jugglery in conimerce. Whether it be tively produce is agreeable to every rational prin carried on between individuals of the same country, or ciple, and must have been designed by a wise Provi- of different countries, it is in all cases bottomed on a fair dence for the universal benefit of His creatures. In principle of reciprocity. Those who will not buy need order that manufactures may be produced, and com- not expect to sell, and conversely. It is impossible to merce brought in to disseminate them both at home export without making a corresponding importation, and abroad where they are wanted, no species of legisla- We get nothing from the foreigner gratuitously; and tive enactment is requisite either to encourage or direct. hence, when we prevent the importation of produce from The law which governs production and consumption is abroad, we prevent by the very same act the exportaa law of nature--it is the overruling principle of self-tion of an equal amount of British produce. All that interest, by which only that quantity of manufactures the exclusion of foreign commodities ever effects, is the is produced which can be advantageously disposed of, substitution of one sort of demand for another. It has and only those commodities purchased and consumed been said, that “when we drink beer and porter me which the wants of individuals require. And curiously consume the produce of English industry, whereas, enough, this principle of self-interest, if allowed free when we drink port or claret we consume the produce scope, is uniformly and sufficiently competent to regulate of the industry of the Portuguese and French, to the both the production and consumption of commodities, obvious advantage of the latter, and the prejudice of to a degree more nice and satisfactory than could be our countrymen!” But how paradoxical soever the asattained by the best devised statutes which the wisest sertion may at first sight appear, there is not at bottom legislators could enact. The grand principle, therefore, any real distinction between the two cases. What is which can alone regulate commerce and manufactures it that induces foreigners to supply us with port and is found in the natural passion for gain; and the sole claret? The answer is obvious:

-We either send diessential requisite for the successful advancement of rectly to Portugal and France an equivalent in British mercantile and manufacturing industry, and wealth produce, or we send such equivalent, in the first place, among any people, is for that people to be unfettered to South America for bullion, and then send that bullion by enactments; each one buying and selling when, to the continent to pay for the wine. And hence it is where, and at what price he pleases.

as clear as the sun at noonday, that the Englishman Evident as these principles must be to all who have who drinks only French wine, who eats only bread any knowledge of social life, they have, either from igno- made of Polish wheat, and who wears only Saxon cloth, rance or some other cause, been generally lost sight of gives, by occasioning the exportation of a corresponding by governments in all ages of the world, and plans have amount of British cotton, hardware, leather, or other been contrired to regulate that which, if left alone, produce, the same encouragement to the industry of his would have much better regulated itself. To such an countrymen that he would were he to consume nothing extent have regulating and restrictive laws been carried not immediately produced at home. A quantity of in some countries, that they have nearly annihilated port wine and a quantity of Birmingham goods are both manufactures and legitimate commerce, and re- respectively of the same value; so that whether we duced masses of the people to the condition of paupers, directly consume the hardware, or having exchanged besides encouraging the pernicious and demoralising it for the wine, consume the latter, in so far as the


employment of British or native labour is concerned it I consideration. In commerce there is, strictly speaking, is altogether indifferent.'

no friendship in the ordinary acceptation of the term. From these explanations, it will be observed that it If there be friendship among the parties concerned, it is immaterial what is given in exchange for imported is a thing aloof from business transactions--a matter goods-whether money or native produce. At the same of private arrangement-and is only to be regarded as time it must be understood that if money is given, such. On this account, even among the most intimate there must exist some active industry in the country friends, there must be an exact mode of dealing, and by which the money is realised. As a general question the most accurate counting and reckoning. in commerce, it is of no consequence what is the nature The British, for several centuries, seem to have been of the industry by which the money is produced. It endowed above all other nations with those qualities may consist in the raising of superabundant crops, or of mind which are suitable for the conducting of comother raw produce for exportation, or of manufacturing merce on an enlarged and liberal scale. Their integrity, raw and comparatively valueless materials into articles persevering industry, enterprise, prudence, and liberaof value and demand, or of carrying goods from one lity of sentiment, have never been excelled. In patient country to another. Unless a country possess one or industry they have been rivalled by the Dutch; but in more of these branches of industry, it is without the point of enterprise and liberality that people have fallen means of paying for imported articles, and must retire far short of them, and their trade has languished from the field of general commerce. England is not of accordingly. The British are pre-eminently a comsufficiently large dimensions to export superabundant mercial as well as a manufacturing people. Taking crops of grain, but it possesses in an extraordinary them generally, they possess a spirit of restless indusdegree the means of manufacturing mineral and other try, which renders them actually unhappy unless when substances into articles for exchange, and it derives no busily engaged in some pursuit calculated to enrich inconsiderable profit from the carrying of commodities. them, or at least to produce for their families the means Its manufactured goods, therefore, pay for imports of of a respectable subsistence. The Americans, who are foreign articles, including bullion or the raw material but a branch of the same British stock, are equally if of money, and these again, in a manufactured state, are not more remarkable for this fervent spirit of industry; a fund for the payment of still further imports. Thus and though only set up as a separate nation within a the wealth of our country has increased.

comparatively recent period, and less distinguished for

their integrity and prudence than the English, have PRINCIPLES OF COMMERCE,

already distanced many of those dignified European The practice of commerce is in a great measure de- principalities and powers which first discovered and pendent on mutual good faith, and the integrity of seller colonised their country. The French, the Germans, the and buyer, and can in no case permanently flourish Spaniards, the Portuguese, the Italians, and others, where these fundamental qualities are wanting. The though each possessing a larger or smaller extent of first or great leading quality, therefore, in the charac- manufactures and commerce, are obviously deficient in ter of a merchant ought to be scrupulous honesty both a national sense of the eager spirit of industry which is in word and deed. The article which he proposes to so characteristic of the people of Great Britain. Taken dispose of must be exactly what he declares it to be, in the gross, they are too apt to addict themselves to not inferior or in any respect unsound in its nature. If amusement in preference to business. They delight it possess any blemishes, these must be announced to in holidays, and will at any time leave their work to the buyer before the bargain is concluded, and if neces- mingle in a dance or some kind of buffoonery in which sary, though at a considerable loss, an allowance made an Englishman would be ashamed to appear. Scarcely for them. The merchant is not less called on to be one of the continental nations, moreover, has yet settled faithful in the fulfilment of all promises which he may down under a well-conducted government appointed by make, whether with respect to goods or their payment; the people. There indeed seems to be little which is because those to whom the promises have been made settled amongst them. Some of the principal are yet may on that account have made similar promises to at that stage of social life which was common in Engothers, and therefore the breaking of a single promise land about the reign of Henry VII.; others are not may prove injurious in every link of a whole train of farther advanced than a period considerably earlier ; transactions. Perfect honesty or integrity is a funda- and all have yet much to suffer and to learn before mental principle of trade; and the next most import- they attain that state of quietude and security to life ant are strict regularity in all proceedings, according and property, that condition of domestic comfort and to established usage, and also steady perseverance. The national prosperity, which Great Britain, with all its merchant must give regular attendance during the hours imperfections, so amply enjoys. of business; be regular in executing all orders and answering all letters; regular in the keeping of his books,

COMMERCIAL TERMS AND TRANSACTIONS. and in the reckoning of his stock and monies; in short, The following explanations of the principal terms he must be methodic and careful in all branches of his used in commerce will illustrate the mode of conductconcerns, for without this species of attention the best ing business transactions :business is apt to become confused, and to be ultimately Firm.-Every business, whether private or public, ruined. What is true of individuals holds true also is conducted under a specified designation or title, when applied to a whole nation. No people have ever called the name of the firm. This name may be that attained opulence and high mercantile consideration of a single individual to whom the business belongs, or who have not possessed a character for integrity and of two or more individuals, or any title which it may be regularity in all their dealings.

found advisable to adopt. Sometimes the name of a Besides these indispensable qualities in the individual firm remains long after all who are indicated by it are character of a merchant or tradesman, there is required dead. In such a case the business has passed into the a happy combination of enterprise and prudence with hands of new proprietors, who, though legally responthe utmost coolness-enterprise to embrace favourable sible for its obligations, are not for some private reason opportunities of buying and selling, and prudence and inclined to change the old and well-known title of their coolness to restrain from engaging in over-hazardous firm. A particular firm or business-concern is someand ruinous speculations. In all his transactions, the times personified in the term housemas, Such a house man of business is understood to proceed upon a cool, does a great deal of business, &c. inflexible principle of doing that which is most advan- Company.Two or more individuals engaged in one tageous for himself, without fear or favour; because in business constitute a company or copartnery, each incommerce each party is supposed to be governed by dividual being called a partner. Companies are of two motives of self - interest (always within the rules of kinds-private and public. A private company is organhonesty and propriety), and is under no obligation to ised by a private arrangement among the parties, each deal from mere personal regard, or any kind of friendly having certain duties to perform, and a certain share in the concern. In companies of the private and com- revenue. For example, if a tradesman turn over his mon description no individual can leave the concern capital twelve times in the year, at each time receiving at his own pleasure, for by doing so he might seriously money for what he sells, he can afford to do business on injure or embarrass his partners. He can withdraw a twelve times less profit than if he could turn over the only after giving a reasonable warning, by which time same capital only once during the year. This leads us is allowed to wind up the concern, or place it in a con- to a consideration of credit. dition to pay him back the capital which he has risked, Credit in business is of the nature of a loan, and or the profits which are his due. No partner, however, is founded on a confidence in the integrity of the can transfer his share to another person, by which a person credited, or the borrower. An individual wishes new member would be introduced into the firm without to buy an article from a tradesman, but he has not the consent of the partners.

money to pay for it, and requires to have it on credit, The profits of partnerships are divided according to giving either a special or implied promise to pay its a specified agreement or deed of copartnery. Generally value at a future time. This is getting credit; and it in the case of partnerships of two or three persons, is clear that the seller is a lender to the buyer. In all each receives the same share on the occasion of an such cases the seller must be remunerated for making annual division, but in other cases a partner may not his loan. He cannot afford to sell on credit on the same be entitled to more than a fourth or sixth part of what favourable terms as for ready money; because if he another receives. The amount of capital which a were to receive the money when he sold the article, he partner invests in the concern, the service he can be to could lay it out to some advantage, or turn it over with the business, and other circumstances, regulate the other portions of his capital. By taking credit the buyer amount of his share. When each of two persons sinks deprives the seller of the opportunity of making this the same capital, but one takes the whole of the trouble, profit, and accordingly, he must pay a higher price for then he on whom the trouble falls, who is called the the article, the price being increased in proportion to active partner, is entitled to receive a stated sum in the the length of credit. It very ordinarily happens that form of salary over and above his share of profits. the seller himself has purchased the article on credit; Whatever be the share which individual partners have but this only serves to increase its price to the consumner, in a concern, the whole are equally liable for the debts and does not prevent the last seller from charging for incurred by the company, because the public give the credit which he gives and the risk of ultimate pay. credit only on the faith that the company generally is ment which he runs. Credit for a short period is responsible. He who draws the smallest fraction of almost essential in all great transactions; but when profit, failing the others, may be compelled to pay the going beyond fair and reasonable limits, it acts most whole debts. On this account every partner, on leaving perniciously on trade, by inducing heedless speculation, a company, should be careful to advertise in the Gazette and causing an undue increase in the number of dealers and newspapers that he no longer belongs to the firm with little or no capital. An excessive competition of which he was a member; he is then responsible for among these penniless adventurers is the consequence; no debts incurred subsequent to the announcement. each strives to undersell the other with the hope of

Public companies are very different: they cousist of getting money to meet his obligations, and thus rast a large body of partners, or proprietors of shares, the quantities of goods are sometimes thrown upon the aggregate amount of which forms a joint stock, and market below the original cost, greatly to the injury hence such associations are called joint-stock companies. of the manufacturer and the regular trader. What They are public, from being constituted of all persons are technically designated 'gluts in the market' frewho choose to purchase shares, and these shares or quently ensue from causes of this nature. rights of partnership are also publicly saleable at any Defoe, who wrote upwards of a century ago, makes time without the consent of the company. The value the following observations on credit and over-trading of a share in a joint-stock company is always the price in his 'Complete English Tradesman:'-* There are two which it will bring in the market; and this may be either things which may properly be called over-trading, and greater or less, in any proportion, than the sum which by both of which tradesmen are often orerthrown: its owner stands credited for in the stock of the com- 1. Trading beyond their stock (or capital); 2. Giring pany. Unless specially provided for in the fundamental too large credit. A tradesman ought to consider and deed of copartnery, every member of a joint-stock com- measure well the extent of his own strength: his stock pany is liable in his whole personal property or fortune of money and credit is properly his beginning; for for the debts of the concern. In some instances this credit is a stock as well as money. He that takes too liability is obviated by the provisions of an act of par- much credit is really in as much danger as he tbas liament, or parliamentary charter, establishing the com- gives too much credit; and the danger lies particularly pany: Joint-stock companies are managed by directors in this, if the tradesman overbuys himself-that is, appointed by the shareholders.

buys faster than he can sell-buying upon credit, the It is an axiom in commerce, that business is much payments perhaps become due too soon for him; the better conducted by single individuals for their own goods not being sold, he must answer the bills upon behoof, than by companies of any kind; as respects the strength of his proper stock—that is, pay for them joint-stock associations, they are only useful in very out of his own cash; if that should not hold out, he is great concerns requiring enormous capital and involv- obliged to put off his bills after they are due, or sufier ing serious risks of loss.

the impertinence of being dunned by the creditor, and Capital.-What is now termed capital was in former perhaps by servants and apprentices and that with the times called stock. The capital of a merchant is strictly usual indecencies of such kind of people. This imthe amount of money which he embarks in his trade, pairs his credit, and if he comes to deal with the same or trades upon--that is, employs for buying goods, merchant or clothier, or other tradesman again, he is paying, wages of servants, and liquidating all debts treated like one that is but an indifferent paymaster; when due. When trading within the limits of his and though they may give him credit as before, yet capital, business is done upon a secure footing; but if depending that if he bargains for six months, he will he proceed beyond these in any material degree, he is take eight or nine in the payment, they consider it in said to be over-trading, and is exposed to the chance of the price, and use him accordingly; and this impairs ruin or very serious embarrassment. Trading beyond his gain, so that loss of credit is indeed loss of money, the amount of available capital is, nevertheless, a pre- and this weakens him both ways. railir error, and causes innumerable bankruptcies. A tradesman, therefore, especially at his beginning, With a comparatively small capital, a tradesman may ought to be very wary of taking too much credit; it carry on a large business by receiving payments shortly would be preferable to let slip the occasion of buying after making his outlays. By this means there is a now and then a bargain to his advantage, for that is rapid turning over of money, and small profits upon usually the temptation, than buying a greater quantity the various transactions speedily mount up to a large of goods than he can pay for, run into debt, and be in.

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